The administration has given a green signal to initiate legal proceedings against major defaulters and also asked banks to provide passport details of individuals in connection with bad loans to the tune of Rs 500 million or $7.7 million.

Government may prevent 91 defaulters from leaving country (Photo credit: Pixabay) &nbsp

New Delhi: Soon after Reserve Bank of India (RBI) Governor Urjit Patel broke his silence on the mega Rs 13,600 crore plus Punjab National fraud, it has come to light that the government has already started taking a harder stand against defaulters. A Bloomberg report suggested that a concerned wing of the government has compiled a list of individuals - whom it plans to bar from leaving the country - for their nexus with companies that have defaulted on loans. A person with knowledge about the development told the publication that the government has come out with a list of 91 people, involved with approximately 400 wilful defaulters, said the report quoting an anonymous source.

The administration has given a green signal to initiate legal proceedings against major defaulters and also asked banks to provide passport details of individuals in connection with bad loans to the tune of Rs 500 million or $7.7 million.

The report, however, does not shed light on the people who have been included in the list; the government may disclose the same publicly in days to come, as the Finance Ministry reiterated an RBI directive to name and shame defaulters on Tuesday. The tightening of regulations in the banking sector is a result of the massive Rs 13,600 crore plus fraud at PNB. Apart from PNB, approximately 30 other banks issued a credit to firms belonging to key accused Nirav Modi and Mehul Choksi's against the 'fake' guarantees.

It may be noted that the general public is dissatisfied with the tightening regulations after the discovery of the fraud, as other businesses are set to get affected due to the illegal activities pursued by Modi and Choksi's companies.

The government has not only barred the use of Letter of Undertaking (LoU) for credit, it has also introduced the Fugitive Economic Offenders Bill (FOEB) to crack down on defaulters who plan to flee the country. Among other things, the government has also asked for passport details of people/entities associated with wilful default cases and have loan counts bigger than Rs 500 million. Meanwhile, another fraud has come to light at the same Mumbai branch of Punjab National Bank. As per a fresh complaint by the police, the fraud worth Rs 91 million or 9.9 crores involves officials of an unheard company called Chandri Paper and Allied Products Pvt Ltd.

The CBI has posted the complaint on its website as well. It has booked ex PNB DGM Gokulnath Shetty and Manoj Hunumat Kharawat, promoters of Chandri Papers. It may be noted that Shetty, who is accused in over Rs 13,900 crore scam, is now blamed for issuing two LoU using same modus operandi to Chandri Papers. LoUs were issued to SBI branch Antwerp on 25 April, 2017.

Currently, all the investigative agencies are trying to track down the fugitive offenders. Back in the country, the investigative agencies are still uncovering key details in the case.

A total of three FIRs have been filed in the case against Modi, his wife Amu, brother Nishal and Choksi. Both the jewellers have denied returning to India, on business and health grounds. There are high chances that the amount of fraud may increase further in future.

Day after RBI Governor breaks silence on PNB fraud, govt mulls barring 91 defaulters from fleeing countryDescription:The administration has given a green signal to initiate legal proceedings against major defaulters and also asked banks to provide passport details of individuals in connection with bad loans to the tune of Rs 500 million or $7.7 million. Times Now